California court confirms that escrow agent’s duty is to the lender not the homeowner

In Ruvalcaba v. Ocwen Loan Servicing, No. 15-cv-00744 (S.D. Ca. July 13, 2017), the District Court for the Southern District of California considered the scope of a title company’s duties when acting as a sub-escrow agent and to whom it owes duties arising out of a lender’s closing instructions and…

Promise to Borrower to modify loan when servicer knows that Borrower is not eligible…

The Ninth Circuit held that a servicer’s promise to a borrower to modify her loan when it knew knows that the borrower was not eligible for a loan modification was an unfair practice under California’s Unfair Competition Law § 17200. The Borrower in Oskoui v. J.P. Morgan Chase Bank, N.A.,…

In Alexander v. AmeriPro Funding, Inc., 848 F.3d 698 (5th Cir. Feb. 16, 2017) the Fifth Circuit held that a lender is not guilty of violating the Equal Credit Opportunity Act (ECOA) because of an alleged policy not to buy loans in the secondary market that rely on a borrower’s…

The Eight Circuit in McKeage v. TMBC, LLC, 847 F.3d 992 (8th Cir. Feb. 13, 2017) affirmed a judgment of $24 million on behalf of a class against a national retailer for charging a fee to prepare the sales contract and other legal documents. As part of a contract to…

Plaintiff’s FDCPA complaint in Benali v. AFNI, Inc., No. CV 15-3605-BRM-DEA (D.N.J. Jan. 4, 2017) asserted two causes of action: a violation of § 1692e by including in a collection letter a false and deceptive reference to a processing fee for payments made electronically and a violation of § 1692f(1)…

Sixth Circuit holds that the failure to bring foreclosure action as counterclaim in FDCPA…

The Sixth Circuit recently confirmed that a servicer and the lender that did not bring a foreclosure action as a counterclaim to a federal FDCPA lawsuit did not waive their ability to foreclose in the future. In Bauman v. Bank of America, 15-3106 (Dec. 23, 2015) 808 F. 3d 1097,…

Second Circuit joins the Seventh and Third Circuits in holding that the Bankruptcy Code…

In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit examined the question whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt Collection Practices Act (FDCPA) or must seek relief in the bankruptcy…

Association’s claim against condominium developer that had advertised it performed “quality work” stated a…

The Illinois Supreme Court affirmed that an action brought by a condominium association against the developers and others, alleging breach of a Chicago ordinance prohibiting misrepresentation in the course of marketing and selling real estate, among other claims, should not have been dismissed. In Henderson Square Condo. Ass’n v. LAB…

Seventh Circuit holds that a lawfully conducted tax sale was a nonetheless a fraudulent…

The Seventh Circuit has held that an Illinois tax sale, lawfully conducted in accordance with the rules governing such sales, was nonetheless a fraudulent conveyance under § 548(a)(1)(B) of the Bankruptcy Code. In In re Smith, No. 15-1166, (7th Cir. Jan. 2016) the Chapter 13 debtors brought an adversary proceeding…

Illinois Appellate Court holds that circuit court has no discretion to deny a deficiency…

The Third District Appellate Court has upset a longstanding practice of circuit courts to deny a mortgagee the right to a deficiency even where the mortgagee has established its right to same. In U.S. Bank Trust, N.A. v. Atchley, 2015 IL App (3d) 150144 (Nov. 17, 2015) the mortgagee filed…